Tariffs have a long history in the US – two charts tell that story
There’s a chart that’s been doing the rounds in recent weeks – American businessman Marc Andreessen tweeted it, and then it was reposted by Donald Trump himself.
The chart is pretty simple: it shows the proportion of American federal government revenues coming from tariffs, going all the way back to the early days of American independence.
And to glance at, it tells a compelling story. For nearly all of the 19th century, tariffs imposed on goods imported into America provided more than half the government’s revenues.
The president’s interpretation was as follows: “The tariffs, and tariffs alone, created this vast wealth for our country. Then we switched over to income tax. We were never so wealthy as during this period. Tariffs will pay off our debt and, MAKE AMERICA WEALTHY AGAIN!”
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The first half of his post is quite true. America’s federal economy was largely built on revenues from tariffs. When Alexander Hamilton was designing much of the federal infrastructure, not to mention paying the debts from the War of Independence, he chose to fund it with tariffs and duties on goods imported to the country.
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Revenue wasn’t the only reason for the tariffs. They were there, too, to protect the country’s nascent industries. But those tariffs were the main source of income for a long time. What changed? Well, from the late 19th century onwards, the size of the American state expanded. Paying for the Civil War was expensive; funding a growing welfare state and national infrastructure in the following decades likewise.
But tariffs can only go so far. There is only so high one can lift these fees before they begin to stifle activity, making goods so expensive to import that domestic consumers face economic damage. That brings us back to the data in the chart approvingly cited by the president.
Take the same numbers and divide them by GDP – the total size of the US economy – another way of skinning it (indeed, the way you’d normally look at long-run historical figures like this). Now everything looks somewhat different. You can see that at no point in American history – even in those early days when tariffs were far higher than today and a far more important source of revenues – did the total amount they raised exceed 6% of gross domestic product. This is not accidental.
It was because tariffs couldn’t raise enough to finance the Federal administration that successive administrations began to collect other taxes on American citizens rather than imports, starting with excise taxes and income taxes in the Civil War. Those taxes, collected by the Internal Revenue Service, ballooned in the following decades – as did the size of the state.
Today the American federal budget is orders of magnitude bigger than two centuries ago (albeit still much smaller than those you find in Europe). The new administration has made it an explicit policy to cut back on waste, led in part by Elon Musk and his DOGE (the Department of Government Efficiency, whose name was seemingly chosen in order to fulfil Mr Musk’s ambition to turn everything into a meme). But there are limits to how far one can cut: a superpower with a large military, vast infrastructure networks such as road and rail, not to mention public health and education systems, does not come for free.
Even so, raising revenue is just one purpose of tariffs. They can also be used as a negotiating tool with other countries (indeed, this might well be their main function in the hands of Mr Trump). They can be used to protect domestic industries against competition.
Whatever the purpose, after decades of relatively free trade around much of the world – most notably America itself – we are living now in an era where tariffs are back. And this story has only just begun.
Donald Trump has announced he is going to deploy National Guard troops to Washington DC to make the US capital’s streets safer.
At a White House news conference on Monday, the president said the city’s police would come under federal control as he said the murder rate in DC was “higher than” in some of the “worst places on earth”.
He said he was sending in the troops to “re-establish law, order, and public safety”.
Members of the National Guard outside the US Capitol. File Pic: AP
Mr Trump said he was announcing a “historic action to rescue our nation’s capital from crime, bloodshed, bedlam and squalor and worse.
“This is liberation day in DC and we are going to take our capital back.”
The president continued: “So today we are declaring a public safety emergency in the district of Columbia.”
He added it is not just about safety but also the “beautification” of the city.
“Washington DC should be one of the safest, cleanest and most beautiful cities anywhere in the world and we’re going to make it that.”
Last week, the Republican president directed federal law enforcement agencies to increase their presence in Washington for seven days, with the option “to extend as needed”.
A member of the National Guard patrols the area outside of the US Capitol in 2021.
File pic: AP
On Friday night, federal agencies including the Secret Service, the FBI and the US Marshals Service assigned more than 120 officers and agents to assist in Washington.
National Guard troops usually belong to individual states and personnel in many cases are trained to help with emergencies that those states have to deal with, such as natural disasters.
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Since they are the reserve force of the US military, National Guard troops are usually part-time, meaning that they have other jobs as well.
Minority leader of the US House of Representatives, Hakeem Jeffries, responded to Mr Trump’s announcement on Monday with a post on X which read: “Violent crime in Washington, DC is at a thirty-year low.
“Donald Trump has no basis to take over the local police department. And zero credibility on the issue of law and order.
“Get lost.”
In a social media post on Sunday, Mr Trump emphasised the removal of Washington’s homeless population, though it was unclear where the thousands of people would go.
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“The Homeless have to move out, IMMEDIATELY,” Mr Trump wrote.
“We will give you places to stay, but FAR from the Capital. The Criminals, you don’t have to move out. We’re going to put you in jail where you belong.”
The White House is considering inviting Volodymyr Zelenskyy to a meeting between Donald Trump and Vladimir Putin in Alaska, according to reports in the US.
The reports come a day after Washington and Moscow confirmed the US and Russian presidents will meet on Friday to discuss bringing about an end to the war in Ukraine.
A senior US official and three people briefed on internal discussions have told Sky News’ US partner network NBC News that the Trump administration is now considering inviting the Ukrainian president to the summit.
“It’s being discussed,” one of the people briefed on the talks was quoted as saying.
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For Ukraine – its exhausted, brave soldiers, its thousands of bereaved families mourning their dead, and its beleaguered president – it is exactly what they feared it would be.
They fear the compromise they will be forced to make will be messy, costly, unfair and ultimately beneficial to the invading tyrant who brought death and destruction to their sovereign land.
The sources said a visit by Mr Zelenskyy has not been finalised – and it is unclear whether the Ukrainian leader will be in Alaska.
However, the senior administration official said it is “absolutely” possible.
“Everyone is very hopeful that would happen,” the official said.
Asked whether the US had officially invited Mr Zelenskyy, a senior White House official said: “The president remains open to a trilateral summit with both leaders. Right now, the White House is focusing on planning the bilateral meeting requested by President Putin.”
On Friday – before the summit was confirmed – Mr Trump had told reporters at the White House that “we’re getting very close to a deal” that would end the conflict.
The US president added there will be “some swapping of territories to the betterment of both sides”.
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Zelenskyy suggests he’s unwilling to give up territory
Yesterday, the Ukrainian president warned that allowing Russia to keep territory it has occupied in Ukraine will result in another invasion.
He said allowing Mr Putin to annex Crimea in 2014 didn’t prevent Russia forces from occupying more parts of Ukraine during the current conflict.
Mr Zelenskyy added: “Now, Putin wants to be forgiven for seizing the south of our Kherson region, Zaporizhzhia, the entire territory of Luhansk and Donetsk regions, and Crimea. We will not allow this second attempt to partition Ukraine.
“Knowing Russia – where there is a second, there will be a third.”
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NATO allies say Ukraine must be involved in negotiations
Ukraine and several NATO allies have reportedly been privately concerned Mr Trump might agree to Mr Putin’s proposals for ending the war without taking their positions into account.
In a joint statement last night, UK Prime Minister Sir Keir Starmer and the leaders of France, Italy, Germany, Poland, Finland and the European Commission said Ukraine’s future cannot be decided without Kyiv.
They said: “Ukraine has the freedom of choice over its own destiny. Meaningful negotiations can only take place in the context of a ceasefire or reduction of hostilities.
“The path to peace in Ukraine cannot be decided without Ukraine.
“We remain committed to the principle that international borders must not be changed by force.
“The current line of contact should be the starting point of negotiations.”
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From left: Volodymr Zelenskyy, Donald Trump and Vladimir Putin. Pics: AP
UK hosts Ukrainian officials ahead of summit
Earlier, Foreign Secretary David Lammy hosted a meeting of top Ukrainian officials and European national security advisers alongside US Vice President JD Vance.
The meeting took place at Chevening, the foreign secretary’s official country retreat in Kent, where Mr Vance is staying at the start of a UK holiday.
After the meeting, Mr Lammy said: “The UK’s support for Ukraine remains ironclad as we continue working towards a just and lasting peace.”
From left: Rustem Umerov, David Lammy, JD Vance and Andriy Yermak. Pic: X/David Lammy
It is understood that the meeting had been called at Washington’s request, and included representatives from the US, Ukraine, France, Germany, Italy, Finland and Poland, as well as the UK.
Ukraine was represented by Rustem Umerov, secretary of the country’s national security and defence council, and the head of Mr Zelenskyy’s office, Andriy Yermak.
In a post on social media, Mr Yermak said the allies’ positions were “clear” that “a reliable, lasting peace is only possible with Ukraine at the negotiating table, with full respect for our sovereignty and without recognising the occupation”.
Ahead of the meeting, Sir Keir discussed the talks in a call with Mr Zelenskyy, and also spoke to French President Emmanuel Macron.
A Downing Street spokeswoman said Sir Keir and Mr Macron “discussed the latest developments in Ukraine, reiterating their unwavering support for President Zelenskyy and to securing a just and lasting peace for the Ukrainian people”.
A man who opened fire on the headquarters of America’s national public health agency – leaving a police officer dead – had blamed the COVID vaccine for making him depressed and suicidal.
Patrick Joseph White, a 30-year-old from Georgia, had tried to enter the Centers for Disease Control and Prevention (CDC) headquarters in Atlanta but was stopped by guards, a law enforcement official said.
They added that White then drove to a pharmacy across the street before opening fire late on Friday afternoon.
He was armed with five guns – including at least one long gun.
DeKalb County Police Officer David Rose, who had three children, was shot dead while responding to the incident.
DeKalb County Police Officer David Rose. Pic: Reuters
White also died, but authorities haven’t said whether he was killed by police or if he killed himself.
His father had contacted police and identified his son as the possible gunman.
White’s father also said his son had been upset over the death of his dog and had become fixated on the COVID-19 vaccine.
Health and Human Services Secretary Robert F. Kennedy Jr, whose scepticism of vaccines has been a cornerstone of his career, voiced support for CDC employees yesterday.
But some laid-off CDC employees said Mr Kennedy shares responsibility for the violence and should resign.
An armed police officer at the scene. Pic: AP
Mr Kennedy has a history as a leader in the anti-vaccine movement, but he reached new prominence by spreading distrust of COVID-19 vaccines. For example, he called it “criminal medical malpractice” to give these jabs to children.
He said after the shooting: “We are deeply saddened by the tragic shooting at CDC’s Atlanta campus that took the life of officer David Rose.
“We know how shaken our public health colleagues feel today. No one should face violence while working to protect the health of others.”
Sarah Boim, a former CDC communications staffer who was fired this year during a wave of terminations, said the shooting was the “physical embodiment of the narrative that has taken over, attacking science, and attacking our federal workers”.
The CDC headquarters in Atlanta, Georgia. Pic: AP
White’s ‘distrust of COVID vaccines’
A neighbour of White told The Atlanta Journal-Constitution that the gunman spoke with her multiple times about his distrust of COVID-19 jabs.
Nancy Hoalst, who lives on the same street as White’s family, said he seemed like a “good guy” but he would bring up vaccines even in unrelated conversations.
“He was very unsettled, and he very deeply believed that vaccines hurt him and were hurting other people.” Ms Hoalst told the Atlanta newspaper. “He emphatically believed that.”
However, she said she never believed White would be violent and added: “I had no idea he thought he would take it out on the CDC.”
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